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- Indonesia officially relocated its capital city from Jakarta to nusantara, located in East Kalimantan on the island of Borneo, on January 26, 2024.This historic move aims to reduce...
- Jakarta, a megacity of over 10 million people, faces notable challenges including traffic congestion, air and water pollution, and land subsidence - sinking at a rate of up...
- 3 of 2022, which established the Nusantara Capital Authority (Otorita Ibu Kota Nusantara - OIKN) to oversee the planning, construction, and management of the new capital city.
Indonesia’s Capital city Officially Moves to Nusantara
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Indonesia officially relocated its capital city from Jakarta to nusantara, located in East Kalimantan on the island of Borneo, on January 26, 2024.This historic move aims to reduce the burden on Jakarta,which suffers from overcrowding,pollution,and sinking land,and to promote more equitable advancement across the archipelago.
Background and Rationale
Jakarta, a megacity of over 10 million people, faces notable challenges including traffic congestion, air and water pollution, and land subsidence – sinking at a rate of up to 5 centimeters per year in some areas. The Indonesian government initiated plans to relocate the capital as early as 2019, citing these issues and the need for a more lasting and strategically located capital. Nusantara, meaning “archipelago” in Sanskrit, was chosen as the new capital due to its central location, lower risk of natural disasters compared to Jakarta, and potential for sustainable urban development.
Legislative Framework and Timeline
The relocation was formally approved through Law No. 3 of 2022, which established the Nusantara Capital Authority (Otorita Ibu Kota Nusantara - OIKN) to oversee the planning, construction, and management of the new capital city. The law outlines a phased relocation process, beginning with government officials and civil servants. The initial stages focused on infrastructure development,including roads,power plants,and water treatment facilities. President Joko Widodo participated in a ceremonial flag-hoisting event on January 26,2024,marking the official transfer of the capital function,though the full relocation of all government functions is expected to take several years.
Financial Implications and Investment
The project is estimated to cost approximately $32 billion, with funding coming from a combination of state budget allocations, private investment, and public-private partnerships. As of December 2023, the Indonesian government had secured approximately $27.8 billion in committed investment for Nusantara, including $6.7 billion from the state budget and the remainder from private investors, according to the OIKN. The government aims to attract further foreign investment to support the development of nusantara as a smart and sustainable city.
Challenges and Future Outlook
The relocation faces challenges including logistical complexities, environmental concerns related to deforestation and biodiversity loss, and potential social impacts on local communities. The OIKN is working to address these issues through sustainable development practices, environmental impact assessments, and community engagement programs. Nusantara is envisioned as a model for sustainable urban development,incorporating green technologies,renewable energy sources,and a focus on environmental conservation. The Indonesian government anticipates that Nusantara will become a globally competitive and livable city, contributing to the country’s economic growth and sustainable development goals.
Source: Reuters,January 26,2024.
Source: Otorita Ibu Kota nusantara (OIKN) Official Website (Accessed January 28, 2026)